New York City (Photo by David Lat)
The biggest and the best New York Biglaw firms are out-performing the industry average. Based on 2023 data collected by ALM, we’ve learned not only have elite New York firms rebounded the sluggish 2022 but they’re kicking ass compared with the rest of the country.
Patrick Smith at Law.com looked at the performance of 19 elite New York firms, and the results are remarkable. In almost every category they kicked butt — year-over-year revenue was up on average of 7.4%, revenue per lawyer rose 4.5% in this group, profits per equity partner saw a rise of 8.8%, and net income was up by 10.1%.
While the overall numbers were up in these major categories, you get more differentiation when you break the numbers out by firm.
Indeed, there’s a wide disparity among New York firms’ performances. For instance, based on American Lawyer data, changes ranged from Shearman’s 7.7% revenue fall to Milbank’s 17.8% revenue growth. On the profits side, net income changes ranged from Debevoise & Plimpton’s -8.2% drop to Cravath’s 22.5% jump.
So who were the winners and losers? In revenue growth:
Among the 19, 16 saw revenue growth, led by Milbank (17.8%), Cravath Swaine & Moore (15.8%) and Wachtell, Lipton, Rosen & Katz (15%). The three with revenue falls include Shearman, Cahill Gordon & Reindel (-2.9%) and Proskauer Rose (-0.7%).
There was also a divide at the revenue per lawyer metric: “The top three firms for RPL growth were Wachtell, Lipton, Rosen & Katz (20.6%), Shearman (13.1%) and Cravath (11.8%), while the sharpest declines in RPL were seen at Proskauer (-6.5%), Debevoise & Plimpton (-2.9%) and Cahill (-2.1%).”
And along other categories as well:
On the PEP side, Cravath led the charge (up 29.1% to $6.05 million), followed by a tie between Fried, Frank, Harris, Shriver & Jacobson (up 20.9% to $4.355 million) and Simpson Thacher & Bartlett (up 20.9% to $6.43 milion). The largest drops in average PEP among the 19 were seen at Cadwalader (-9.6% to $2.78 million); Debevoise (-8.5 to $4.04 million); and Schulte (-7.7% to $3.34 million).
Net income growth was some more of the same, with Cravath leading percentage-wise, (22.5%), followed by Simpson Thacher (20.3%) and Milbank (20%).
Overall attorney headcount growth percentage saw a tie at the top, with both Milbank and Willkie, Farr & Gallagher seeing 7.6% growth year over year. Simpson, Thacher & Bartlett was third with 6.8% growth. Shearman, facing a merger with Allen & Overy next month, saw the largest headcount drop in 2023, down by 18.4%, followed by Wachtell, down by 4.6%.
Despite these differences, as a group, the elite of NY Biglaw did better than the rest. As Gretta Rusanow, managing director and head of Law Firm Advisory Services, Law Firm Group at Citi, noted, they ”outperformed on demand and productivity,” had “higher than industry average revenue growth” and “better expense management.”
So, yeah, New York is King of Biglaw.
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @Kathryn1@mastodon.social.
